Electricity network companies have been accused of foot-dragging over moves to enable smaller players to compete.
“Final-mile” utility companies that install networks for new developments say Distribution Network Operators (DNOs) are giving ground only grudgingly, under regulatory pressure.
SSE this week failed a competition test set by Ofgem for grid connections. It is now the only DNO not to have passed in any of the nine market segments identified by the regulator. UK Power Networks and Electricity North West are retaking tests on certain segments after mixed success in the first round.
Clive Lindsell, managing director of independent DNO Brookfield Utilities, welcomed Ofgem’s decision on SSE. “Ofgem is a bit slow – it has taken it years to get to this point – but it is heading in the right direction.”
Some DNOs have a long way to go, according to Lindsell, in what has been a frustrating journey for final-mile operators. “They [DNOs] tend to be unco-operative and slow, and that makes us look bad,” he said.
DNOs denied dragging their feet. UKPN chief executive Basil Scarsella said UKPN had significant market share in some areas, which “will not convince anyone that competition has started to bite”. However, he insisted it was “not for lack of trying”.
Michael Proctor, head of connections for Electricity North West, said the company was proud to be the first to submit applications in all segments and was confident it would pass this time round.
Ofgem has set competition tests on nine segments of the connections market. Between them, DNOs have passed roughly one in five segments and have applications outstanding on the same number. The regulator will review progress in 2014 and could refer companies to the Competition Commission.
The regulator said some DNOs had taken “active steps” to level the playing field for competitors. “There may be more that can be done and we would encourage each DNO to continue to seek opportunities to improve arrangements.”
This article first appeared in Utility Week’s print edition of 3rd May 2013.
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